Don’t Buy a Business Without This: The Investor’s Business for Sale Checklist

What Makes a Business Worth Buying?

Most buyers focus on revenue, brand, or location. But experienced investors know those are surface-level factors. The real question is: does this business function as a repeatable, transferable system that generates profit without constant firefighting?

A business worth buying typically has:

• Reliable cash flow that isn’t tied to one-off projects or a handful of customers
• Low owner-dependence — the founder can disappear for two weeks without chaos
• Transferable value — systems, staff, suppliers, and customers stay post-sale
• Strategic fit — it complements your skills, goals, or existing portfolio

The best businesses aren’t necessarily flashy. Often, they’re boring, stable, systemised operations run by someone who’s simply ready to move on. That’s your opportunity — if you know what to look for.

Investor Archetypes: Know Your Lens

Before you can assess whether a business is a good investment, you need to understand who you are as an investor. Your lens — your goals, appetite for risk, time involvement, and exit horizon — will shape what “good” looks like. Here are the most common investor archetypes I work with:

1. The Lifestyle Buyer

This buyer is escaping corporate life or looking for a sea-change. They want flexibility, moderate income, and alignment with personal values. Common targets include cafés, fitness studios, wellness clinics, and consultancies. Their risk? Making emotionally driven decisions and underestimating operational complexity.

2. The Strategic Operator

Often a tradie, franchisee, or business owner acquiring horizontally or vertically. This buyer is hands-on and wants to grow through systemisation or team leverage. They’re often buying bolt-ons to gain clients, IP, or local market share. Their challenge? Balancing the old culture with their systems and processes.

3. The Portfolio Builder

This buyer sees business as an investment class — like real estate or equities. They often acquire cashflow-positive ventures, keep the team in place, and hire a manager. Their key metric is return on capital employed (ROCE), and they’re focused on yield. Their risk? Over-indexing on spreadsheets without understanding on-the-ground dynamics.

4. The Turnaround Specialist

This investor is looking for undervalued or underperforming businesses they can fix and flip. They thrive on process improvement, cost-cutting, and leadership turnarounds. High risk, high potential reward — but requires strong experience and capital buffer.

5. The Growth Hacker

Usually digital-savvy, this buyer focuses on scaling an existing business using marketing automation, SEO, funnels, and tech tools. They often target businesses with strong product/market fit but poor online presence. Risk? Underestimating physical ops or team constraints that can't be solved with code.

There’s no “best” type. But knowing which one you are helps you filter businesses that match your approach — and avoid those that don’t.

The Business for Sale Checklist: 7 Key Areas

This is where deals are made or lost. Below are the seven essential areas every buyer must interrogate before signing anything. Each one reveals whether you're buying a stable asset or inheriting a hidden mess.

1. Financials

• 3 years of full financials (P&L, balance sheet, cash flow)
• Add-backs and normalisation clearly explained
• BAS statements and ATO liabilities disclosed
• Clear treatment of owner wages and related-party transactions
• Accountant-prepared or independently verified documents

2. Customers & Revenue

• No single customer contributing more than 30% of revenue
• Contracts in place for major accounts or long-term clients
• Recurring revenue model or predictable cash flow
• Trends in churn, referrals, and customer complaints
• Competitive advantage or loyalty beyond price

3. Operations & Systems

• Core processes documented (SOPs, checklists, software)
• CRM, inventory, or booking systems in place
• Minimal reliance on paper-based workflows
• Capacity to scale without heavy reinvestment
• Business can run without the owner for 2+ weeks

4. Team & People

• Contracts, pay rates, and leave entitlements documented
• Key roles not concentrated in one person
• Culture fit and morale checked (staff interviews, turnover)
• Any contractors correctly classified and compliant
• Succession plan or manager in place (if required)

5. Legal & Risk

• Lease reviewed — term, escalations, exit clauses
• Supplier and distributor agreements available
• IP ownership confirmed (brand, website, software)
• No pending disputes, insurance claims, or legal actions
• Licences and permits valid and transferable

6. Owner Dependence

• Handover plan documented
• Sales, operations, and delivery not reliant on seller
• Brand not built solely around owner’s name or face
• Relationships with clients and suppliers can be transferred
• Owner willing to assist during transition period

7. Strategic Fit

• Business aligns with your skills, resources, and time
• Clear opportunity to add value or scale
• Low overlap or friction with existing commitments
• Industry outlook and local trends are positive
• Gut check: would you still buy this if you couldn’t sell it?

This checklist isn’t just a formality — it’s your negotiation tool, risk filter, and decision compass. The better you ask now, the fewer regrets you have later.

How to Use This Checklist Effectively

This checklist isn’t something you skim on settlement day. It’s a working tool that should shape how you filter, interrogate, and value every business you consider. Here’s how to put it to work:

🔍 Before You Enquire

Use the checklist to set your filters. Eliminate businesses that clearly don’t meet your non-negotiables (e.g. too owner-dependent, poor financial records, or no systems).

📞 When You Speak to the Broker or Seller

Use the checklist as your conversation guide. Don’t just ask “What’s the revenue?” — ask about customer concentration, owner hours, lease terms, and team structure. It shows you’re serious and not easily impressed by surface stats.

🧠 During Due Diligence

Work through every line item. Tick them off as you verify them. Where documents are missing or answers are vague, treat that as a red flag, not an inconvenience.

💬 In Strategy Sessions or Deal Reviews

Bring this checklist to your lawyer, accountant, or advisor. It creates a common language and stops you from relying on gut feel or seller charm.

📝 As a Negotiation Tool

Every unchecked box can lower the price, shift risk, or become part of the conditions of sale. This isn’t just diligence — it’s deal leverage.

The smarter you are with this checklist, the faster you’ll spot the difference between a solid business and an expensive distraction.

Case Study: Two Buyers, Two Outcomes

Let me introduce you to two fictional buyers — both looking at similar-sized businesses in the same industry, right here in Queensland. The difference? One followed the checklist. The other didn’t.

Buyer A: The Checklist Champion

Jenny, a former marketing exec, was buying a coastal service-based business. She worked through every point on the checklist — verified financials, reviewed the lease terms, interviewed the staff, and clarified the owner’s role. When she spotted an over-reliance on one contractor, she negotiated a lower price and a 60-day handover. The deal went through smoothly, and the business has since grown 18% YOY with no staff turnover.

Buyer B: The Shortcut Taker

Mike was a first-time buyer with plenty of cash but limited business experience. He loved the brand and location and trusted the seller. He didn’t review the BAS statements or check how many hours the owner was working. Post-settlement, he found out the owner was doing 60+ hours a week and had personal relationships with every major client. Within 3 months, two clients had left, a key staff member resigned, and cash flow dipped below breakeven. Mike is now trying to exit — at a loss.

The lesson? Checklists aren’t bureaucracy. They’re risk insurance — and the cheapest kind you’ll ever buy.

The Red Flag Index: When to Walk Away

Not every deal deserves to close — and knowing when to walk away is what separates amateur buyers from smart investors. These red flags should cause you to pause, investigate further, or pivot entirely.

🚩 Financial Red Flags

• Inconsistent financial records or missing BAS statements
• Overreliance on cash sales or suspiciously low declared income
• Owner unwilling to share historical performance or projections
• Discrepancies between Xero files and PDF reports

🚩 Operational Red Flags

• No documented processes or key knowledge locked in owner's head
• Staff not aware the business is for sale
• Technology or systems not updated in years
• Lease expiring soon with no renewal or poor terms

🚩 Cultural or HR Red Flags

• High staff turnover with no clear reason
• Unclear contracts or underpayment issues
• Disengaged team or toxic workplace culture
• Key person risk not mitigated with succession planning

🚩 Seller Behaviour Red Flags

• Pushy seller rushing you to sign without full access to data
• Unwillingness to allow staff interviews or handover time
• Vague responses to simple operational questions
• “Trust me” used instead of documented proof

You don't need perfection — but you do need clarity. One red flag might be manageable. Three or more? It’s time to reassess or renegotiate — or walk away with your capital intact.

FAQs from Investors

“What’s a fair multiple for a small business?”

It depends on industry, risk profile, and earnings quality. Most small businesses sell between 2.0x–3.5x EBITDA, but inflated owner roles, weak documentation, or poor handover planning can drag that down fast.

“Is goodwill real value or just fluff?”

Goodwill can reflect true brand equity and customer loyalty — or just be the gap between a dream price and reality. Scrutinise what makes up the goodwill and whether it’s transferable post-sale.

“Should I use a buyer’s agent or go direct?”

If you’re new to business acquisition or looking at multiple deals, a good buyer’s advocate can be worth their fee. They’ll spot risks you won’t, manage negotiations, and save you time. But always do your own thinking — the cheque has your name on it.

“How long should due diligence take?”

For small to mid-sized businesses, expect 2–4 weeks minimum. Rushing this phase is a recipe for regret. Remember: the real cost of due diligence is not doing it properly.

“What if the seller pushes me to skip steps?”

Walk away. Pressure, urgency, and withheld information are red flags. A good seller with nothing to hide will welcome a thorough buyer.

Still got questions? That’s a good sign. Business buying isn’t simple — but with the right tools and advice, it’s incredibly rewarding.

Next Steps: Where to Go from Here

You’ve made it this far, which tells me you’re serious about buying a business the right way. Now it’s time to act on what you’ve learned.

📥 Download the Full Checklist

Get the full investor checklist I use with private clients — including every document request, ratio to calculate, and question to ask. Download it here.

💼 Visit the Investor Hub

Access tools, guides, and expert resources to support your next acquisition. Whether you’re looking to buy your first business or build a portfolio, the Investor Hub is built for you.

📞 Book a Strategy Call

Want a second set of eyes on a deal? Or a game plan tailored to your goals? Book a 30-minute strategy call with me and let’s map out your next move.

You’re not buying a business — you’re buying time, freedom, and leverage. Do it deliberately. And remember: every great acquisition starts with the right checklist.

Conclusion: Buy Bold, Not Blind

Buying a business is one of the most powerful moves you can make as an investor. It’s leverage in action — you acquire a system, team, brand, and cash flow that’s already in motion. But only if you buy well.

The most expensive mistakes in business acquisitions don’t show up in the asking price. They show up in the first 6 months post-settlement — when reality hits. That’s why this checklist exists. It’s not just a formality. It’s a defence against regret and a filter for clarity.

If you’ve made it this far, you’re not the average buyer. You’re someone who thinks ahead, digs deeper, and plays the long game. That’s who I work with. And that’s who wins.

Stay sharp. Stay curious. And remember: bold doesn’t mean reckless — it means informed, prepared, and committed to playing at a higher level.